What are the emerging challenges in microinsurance?
The second big question of the year relates to a paper entitled "Visions of the Future of Microinsurance, And Thoughts on Getting There", which was published by USAID in 2008. Microinsurance experts identified in the paper four general challenges to further the development of microinsurance:
- Coordination of knowledge of activities to allow all parties (...) to maximize effectiveness.
- Improving products and processes that recognize the needs of low-income families and satisfy their needs with value.
- Innovation in processes that can be replaced or augmented by technology.
- Careful development of regulation that effectively balances the need for consumer protection with the flexibility needed to develop and service a massive market. (source)
Read the article "What are the emerging challenges in microinsurance?" and let us know what you think by commenting and answering the questions below:
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Comments
2012-07-25 by HenryYan henry.yan@access-to-insurance.org
Insurance supervisors need to take the lead and create a stable and sustainable environment for the market to develop and flourish. This in itself remains a big challenge.
Following on from this, the industry needs to work together to develop the market. The ever-present challenge still applies of being able to show that microinsurance demonstrates good value to the customer as well as to the provider and the distributor.
2012-08-14 by CraigChurchill churchill@ilo.org
While I agree with Henry that the regulatory environment remains a challenge in many markets, I think there are two other issues that are greater obstacles to the success of micronsurance:
a) efficiency: with small premiums, greater efforts need to be made to reduce the operating costs for microinsurance administration.
b) increasing choice: big volumes and viable products are possible with mandatory insurance, but how can we increase choice to better understand the needs and preferences of the low-income market?
Not surprisingly, these two issues are somewhat in conflict with each other - the process of creating choice can increase operating costs - hence these are new challenges as we move towards more voluntary microinsurance products.
2012-08-16 by gabyramm gaby.ramm@micro-insurance.de
While the numbers of products have increased significantly not all the products create client value. A commonly accessible data base of products would increase transparency and would provide an indication of the range of microinsurance policies. As it is neither possible nor useful to present “thousands” of products, the KPIs/SPIs and the PACE tool could be applied for selecting products along the broad categories of low, middle, and high client value. Products have to be perceived in a given context which cannot be fully presented in a data base but if an introductory note could clarify this issue such a data base would be useful for product developers (industry), delivery channels (selling the “better” products), and ultimately to the clients who can access to the information.
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